Question
In: Accounting
On August 1, 2020 Gillian’s Gems exchanged productive Assets with Tara’s Treasures with the following data...
On August 1, 2020 Gillian’s Gems exchanged productive Assets with Tara’s Treasures with the following data related to the Assets:
Gillian’s Tara’s
Equipment cost $96,000 $110,000 ==> ($96000 Gillian's , $110000 Tara's)
Accumulated Depreciation $40,000 $47,000 ==> ($40000 Gillian's, $47000 Tara's)
Fair Value, Date Exchange $60,000 $75,000 ==> ($60,000 Gillian's , $75,000 Tara's)
Cash Paid by Gillian $15,000 ==> ( $15,000 Gillian's)
Cash Received by Tara $15,000 ( $15,000 Tara's)
Required:
- Assuming the above listed transaction has Commercial Substance, record the exchange for both Gillian’s Gems and Tara’s Treasures in accordance with GAAP.
- Record the same entry, assuming the transaction lacks Commercial Substance.
Solutions
Expert Solution
ANSWER:
(a).
|
HAS Commercial Substance |
|||
|
Accounts title |
Debit |
Credit |
Working |
|
Gillian's |
|||
|
Equipment (new) |
$75,000 |
Fair Value of old Equipment + Cash paid |
|
|
Accumulated Depreciation |
$40,000 |
Of Old Equipment |
|
|
Gain on Exchange |
$4,000 |
Balancing amount |
|
|
Equipment (Old) |
$96,000 |
Cost of old Equipment |
|
|
Cash |
$15,000 |
Cash paid |
|
|
Tara's |
|||
|
Equipment (new) |
$60,000 |
Fair value of Equipment received |
|
|
Accumulated Depreciation |
$47,000 |
Of Old Equipment |
|
|
Cash |
$15,000 |
Cash received |
|
|
Gain on exchange |
$12,000 |
Balancing amount |
|
|
Equipment (Old) |
$110,000 |
Cost of old Equipment |
(b).
|
LACKS Commercial Substance |
|||
|
Accounts title |
Debit |
Credit |
Working |
|
Gillian's |
|||
|
Equipment (new) |
$71,000 |
Balancing amount |
|
|
Accumulated Depreciation |
$40,000 |
Of Old Equipment |
|
|
Equipment (Old) |
$96,000 |
Cost of old Equipment |
|
|
Cash |
$15,000 |
Cash paid |
|
|
Tara's |
|||
|
Equipment (new) |
$60,000 |
Fair value of Equipment received |
|
|
Accumulated Depreciation |
$47,000 |
Of Old Equipment |
|
|
Cash |
$15,000 |
Cash received |
|
|
Gain on exchange |
$12,000 |
Balancing amount |
|
|
Equipment (Old) |
$110,000 |
Cost of old Equipment |
=================
DEAR STUDENT,
IF YOU HAVE ANY QUERY PLEASE ASK ME IN THE COMMENT BOX,I AM HERE TO HELP YOU.PLEASE GIVE ME POSITIVE RATING..
****************THANK YOU******************
ekkarill92 answered 1 year agoRelated Solutions
On August 1, 2020 Gillian’s Gems exchanged productive Assets with Tara’s Treasures with the following data...
On August 1, 2020 Gillian’s Gems exchanged productive Assets
with Tara’s Treasures with the following data related to the
Assets:
Gillian’s
Tara’s
Equipment
cost
$96,000
$110,000
Accumulated
Depreciation
$40,000
$47,000
Fair Value, Date
Exchange
$60,000
$75,000
Cash Paid by
Gillian
$15,000
Cash Received by
Tara
$15,000
Required:
Assuming the above listed transaction has Commercial Substance,
record the exchange for both Gillian’s Gems and Tara’s Treasures in
accordance with GAAP.
Record the same entry, assuming the transaction lacks
Commercial Substance.
On August 1, Splish, Inc. exchanged productive assets with Blossom, Inc. Splish’s asset is referred to...
On August 1, Splish, Inc. exchanged productive assets with
Blossom, Inc. Splish’s asset is referred to below as “Asset A,” and
Blossom’ is referred to as “Asset B.” The following facts pertain
to these assets. Asset A Asset B Original cost $ 142,080 $ 162,800
Accumulated depreciation (to date of exchange) 59,200 69,560 Fair
value at date of exchange 88,800 111,000 Cash paid by Splish, Inc.
22,200 Cash received by Blossom, Inc. 22,200 Assuming that the
exchange of Assets A...
On August 1, Teal, Inc. exchanged productive assets with Flint, Inc. Teal’s asset is referred to...
On August 1, Teal, Inc. exchanged productive assets with Flint,
Inc. Teal’s asset is referred to below as “Asset A,” and Flint’ is
referred to as “Asset B.” The following facts pertain to these
assets. Asset A Asset B Original cost $105,600 $121,000 Accumulated
depreciation (to date of exchange) 44,000 51,700 Fair value at date
of exchange 66,000 82,500 Cash paid by Teal, Inc. 16,500 Cash
received by Flint, Inc. 16,500 Assuming that the exchange of Assets
A and B...
On August 1, Sarasota, Inc. exchanged productive assets with Ivanhoe, Inc. Sarasota’s asset is referred to...
On August 1, Sarasota, Inc. exchanged productive assets with
Ivanhoe, Inc. Sarasota’s asset is referred to below as “Asset A,”
and Ivanhoe’ is referred to as “Asset B.” The following facts
pertain to these assets. Asset A Asset B Original cost $117,120
$134,200 Accumulated depreciation (to date of exchange) 48,800
57,340 Fair value at date of exchange 73,200 91,500 Cash paid by
Sarasota, Inc. 18,300 Cash received by Ivanhoe, Inc. 18,300 (a)
Assuming that the exchange of Assets A and...
On August 1, Flounder, Inc. exchanged productive assets with Culver, Inc. Flounder’s asset is referred to...
On August 1, Flounder, Inc. exchanged productive assets with
Culver, Inc. Flounder’s asset is referred to below as “Asset A,”
and Culver’ is referred to as “Asset B.” The following facts
pertain to these assets.
Asset A
Asset B
Original cost $132,480
$151,800
Accumulated depreciation (to date of exchange)
55,200
64,860
Fair value at date of exchange
82,800 103,500
Cash paid by Flounder, Inc.
20,700
Cash received by Culver, Inc.
...
On August 1, Ivanhoe, Inc. exchanged productive assets with Shamrock, Inc. Ivanhoe’s asset is referred to...
On August 1, Ivanhoe, Inc. exchanged productive assets with
Shamrock, Inc. Ivanhoe’s asset is referred to below as “Asset A,”
and Shamrock’ is referred to as “Asset B.” The following facts
pertain to these assets.
Asset A
Asset B
Original cost
$111,360
$127,600
Accumulated depreciation (to date of exchange)
46,400
54,520
Fair value at date of exchange
69,600
87,000
Cash paid by Ivanhoe, Inc.
17,400
Cash received by Shamrock, Inc.
17,400
Assuming that the exchange of Assets A and B...
On August 1, Flounder, Inc. exchanged productive assets with Culver, Inc. Flounder’s asset is referred to...
On August 1, Flounder, Inc. exchanged productive assets with
Culver, Inc. Flounder’s asset is referred to below as “Asset A,”
and Culver’ is referred to as “Asset B.” The following facts
pertain to these assets.
Asset A
Asset B
Original cost
$132,480
$151,800
Accumulated depreciation (to date of exchange)
55,200
64,860
Fair value at date of exchange
82,800
103,500
Cash paid by Flounder, Inc.
20,700
Cash received by Culver, Inc.
20,700
Assuming that the exchange of Assets A and B...
On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to...
On August 1, Hyde,
Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is
referred to below as “Asset A,” and Wiggins' is referred to as
“Asset B.” The following facts pertain to these assets.
Asset A
Asset B
Original cost
$96,000
$110,000
Accumulated depreciation (to date of exchange)
40,000
47,000
Fair value at date of exchange
60,000
75,000
Cash paid by Hyde, Inc.
15,000
Cash received by Wiggins, Inc.
15,000
Instructions
(a)
Assuming that the
exchange of Assets A...
Problem 10-9 On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde’s asset is...
Problem 10-9 On August 1, Hyde, Inc. exchanged productive assets
with Wiggins, Inc. Hyde’s asset is referred to below as “Asset A,”
and Wiggins’ is referred to as “Asset B.” The following facts
pertain to these assets. Asset A Asset B Original cost $96,000
$110,000 Accumulated depreciation (to date of exchange) 40,000
47,000 Fair value at date of exchange 60,000 75,000 Cash paid by
Hyde, Inc. 15,000 Cash received by Wiggins, Inc. 15,000 Assuming
that the exchange of Assets A...
Bogut Co. and Nadal exchanged productive assets. The asset surrendered by Bogut had a carrying amount...
Bogut Co. and Nadal exchanged productive assets. The asset
surrendered by Bogut had a carrying amount and a list price of
$10,000 and $15,000, respectively. The asset received by Bogut had
a fair value of $13,000. If Bogut paid Nadal $2,000 in cash, Bogut
should recognize a gain (loss) of
Group of answer choices
$(4,000)
$0
$2,000
$1,000
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You’re choosing between two job offers. Both are with respected organizations and desirable work. The first...
- 46. a) Explain why a pattern of bright and dark fringes is visible on a screen...
- In your opinion, what is the most critical issue in the area of health care records...
- With the code that is being tested is: import java.util.Random; public class GVdate { private int...
- Macroeconomic variables are indicators or main signposts signalling the current trends in the economy”, keeping in...
- Discuss the various types of frictions and distortions in labor and product markets that make the...
- Ringmeup, Inc., had net income of $137,200 for the year ended December 31, 2016. At the...
ADVERTISEMENT